Labor’s Federal Budget 2023 didn’t bring many surprises for medical professionals, but there are a few noteworthy changes worth mentioning.

Following are the key highlights.

Medicare Funding Improvements

The budget includes long-awaited improvements to Medicare funding, benefiting medical professionals and patients alike. In particular, this included $3.5 billion in funding over five years from 2023-24 for a tripling of the bulk billing incentive.

Pay Day Superannuation

To combat unpaid employee superannuation, the Government plans to align the payment frequency of superannuation with salary and wages. Starting from July 1, 2026, this change will have a significant cash flow impact for employers, particularly small businesses.

Small Business Support

Small businesses will see the return of the $20,000 instant asset write-off for one year, aiming to ease taxpayers back to pre-write-off levels. Additionally, there’s a proposed 20% additional deduction for expenditure on energy-efficient assets, excluding electric vehicles and fuel-powered assets.

Efficiency in (Some) Energy Spending

A 20% additional deduction is proposed for depreciating assets that support “electrification and more efficient use of energy”. It would apply to energy efficient appliances, equipment and energy storage assets (such as batteries and upgrades). Unfortunately, electric vehicles, solar panels and fuel powered assets are excluded. The bonus deduction will be available for eligible assets from 1 July 2023 to 30 June 2024 up to $100,000 (max. $20,000 bonus deduction).

Electric Vehicles & FBT Exemption

The Fringe Benefits Tax (FBT) exemption for plug-in hybrid electric cars will be removed from April 1, 2025 onwards. However, arrangements entered into between July 1, 2022, and March 31, 2025, will remain eligible for the exemption.

Superannuation Tax Break Changes

The Government plans to increase the tax on “earnings” for superannuation balances above $3 million to 30% from July 1, 2025.

Compliance Activity

The budget emphasizes strengthening compliance regimes. The Australian Taxation Office will invest in upgrading systems, and there will be measures to lower the tax-related administrative burden for small businesses. However, audit activities, including GST compliance, Superannuation Guarantee compliance, and Personal Income Tax Compliance, will be intensified.

Other Measures

A number of other measures of relevance to medical professionals include the following:

• $445.1 million over five years from 2023-24 to support a 30 percent increase to the Workforce Incentive Program, increasing the maximum payment to $130,000 per practice.
• $99.1 million over five years from 2023-24 to facilitate the creation of a new level E MBS item for consultations lasting 60 minutes or longer.
• Funding for longer telehealth item numbers, tied to registered patients (not bulk billing).
• $145 million to support after-hours care, targeted at homeless and culturally and linguistically diverse people.
• $50 million for wound consumables, specific to patients with diabetes aged over 65 years.
• The extension of Practice Incentive Program Quality Improvement (PIP QI) payments for at least another 12 months.
• $4.5 million over five years to increase rural generalist trainees by expanding the single employer model trials by a further 10 trial sites from July 1.
• $98.9 million over four years from 2023-24 for connecting frequent hospital users to general practice to receive multidisciplinary care in the community.

Learn More

If you have any questions about how the Federal Budget might impact you or your medical business, please contact Kristy Baxter or Angela Stavropoulos from the Pilot Medical Services team on taxmed@pilotpartners.com.au or 07 3023 1300.